January 12, 2009
The Court of Appeal of California affirmed a lower court decision in a case involving John and Ned Roscoe, two California businessmen, and applied the “responsible corporate officer” doctrine in a case involving a 3,000 gallon gasoline tank spill. According to the California court decision,People v. Roscoe, C055801 (Cal. App. 12/26/2008), the Roscoes failed to respond to multiple notices received from local environmental authorities. The court found that a timely cleanup would have cost approximately $400,000 instead of $1.5 million paid by the State of California’s Underground Storage Tank Cleanup Fund.
The court rejected the Roscoes claims that they were immune from liability under laws governing storage tanks. Instead, the court found that both individuals were liable under the “responsible corporate officer” doctrine. The California court applied a three-part test first stated by the Minnesota Court of Appeals in Matter of Dougherty, 482 N.W.2d 485 (Minn. Ct. App 1992).
The court held that the lower court’s imposition of civil penalties in the amount of $2.4 million was not excessive as was argued by the defendants.
The California case follows and expands on a growing trend where state and federal environmental authorities are seeking to hold individuals – especially corporate officers – liable for environmental violations. Environmental law attorney Joseph G. Maternowski has litigated multiple cases involving the imposition of penalties on corporate officers and individuals. Mr. Maternowski heads up the Hessian & McKasy Environmental Law Attorney Practice Group. He provides advise to clients on a range of issues involving environmental liability. A copy of the People v. Roscoe decision can be found at: http://www.courtinfo.ca.gov/opinions/documents/C055801.PDF
The views expressed here are my own and do not reflect the views of my employer, Hessian & McKasy. P.A.
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